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July 2nd 2020: DXY Nudges Towards 97.00 Ahead of US Non-Farm Payrolls

July 2nd 2020: DXY Nudges Towards 97.00 Ahead of US Non-Farm Payrolls, FP Markets

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

May, as you can see, recovered off worst levels out of demand from 1.0488/1.0912.

June extended gains to highs at 1.1422, though mid-month ran into opposition at the lower ledge of supply from 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).

With reference to the primary trend, the pair has exhibited clear lower peaks and troughs since 2008.

Daily timeframe:

Brought forward from previous analysis –

The month of June observed EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern. The base is comprised of an 88.6% Fib level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 (red oval).

It’s typical, in the case of bearish formations, to see traders sell PRZs and place protective stop-loss orders above the X point (1.1495). Common take-profit targets fall in at the 38.2% and 61.8% Fib levels (of legs A/D) at 1.1106 and 1.0926, respectively.

As you can see, the aforesaid Fib targets have yet to be met.

H4 timeframe:

Partially altered from previous analysis –

Mid-way through London on Wednesday, demand from 1.1189/1.1158 (prior supply) re-entered the scene and fashioned a hammer candlestick formation (considered a bullish signal), putting forward a moderately bullish tone into the close.

Channel resistance is in sight as the next available upside target (1.1422), followed by resistance at 1.1348.

Failure to uphold current demand could result in another layer of demand making a show at 1.1115/1.1139, an area sharing space closely with channel support (1.1168).

H1 timeframe:

In conjunction with yesterday’s hammer candlestick pattern on the H4, Wednesday also brought through a H1 hammer candlestick formation out of demand at 1.1181/1.1202 (glued to the upper edge of H4 demand at 1.1189/1.1158). This, as you can see, threw price above the 100-period simple moving average and the 1.1250 level. Notice the latter is currently holding as support.

Above 1.1250, a rally-base-drop supply can be viewed at 1.1288/1.1278 (boasting strong downside momentum out of its base).

Structures of Interest:

Partially altered from previous analysis –

Monthly supply at 1.1857/1.1352 emphasises a bearish tone in this market, while the daily chart reminds traders there’s also scope for a drop to the 38.2% Fib level at 1.1106.

The H4 timeframe continues to dance with demand at 1.1189/1.1158, with H1 rebounding from 1.1250 as support and throwing light on supply at 1.1288/1.1278. Sellers may want to exercise caution at the aforesaid supply, due to the threat of a whipsaw to 1.13, a level that joins with H4 channel resistance (1.1422). 1.13, therefore, makes for an interesting base for sellers.

July 2nd 2020: DXY Nudges Towards 97.00 Ahead of US Non-Farm Payrolls, FP Markets

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

May’s extension, as well as June’s follow-through, has supply at 0.7029/0.6664 echoing a vulnerable tone at the moment, particularly as long-term trendline resistance (1.0582) shows signs of giving way.

Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.

Daily timeframe:

Partially altered from previous analysis –

After June 11 overpowered support at 0.6931, the base proved itself as a resistance throughout the month

Following a period of hesitation, AUD/USD bulls made an entrance Tuesday, with Wednesday swinging 0.6931 back into action.

In case of a break to the upside, two trendline resistances inhabit territory close by (prior supports – 0.6744/0.6671). Support at 0.6755 also remains in position to the downside, with a break shedding light on the 200-day simple moving average at 0.6666, a dynamic value in the process of flattening, following months of drifting lower.

H4 timeframe:

Since June 10, H4 has been in the process of forming a potential pennant pattern between 0.7064/0.6776, generally considered a continuation pattern.

Outside of the aforesaid configuration, demand at 0.6773/0.6814 is in sight. Traders will note this area also aligns with a 38.2% Fib level at 0.6808. To the upside, we have supply visible at 0.7058/0.7029.

H1 timeframe:

Following a dip to 0.6877, just ahead of the 100-period simple moving average, the pair clawed back lost ground and regained a footing above 0.69. US trading probed nearby supply at 0.6948/0.6935, shaped by way of a shooting star candlestick pattern (a bearish signal).

0.69, joined closely with trendline support (0.6832), therefore, represents near-term support going into Thursday’s session.

Structures of Interest:

According to the monthly timeframe, although we’re still trading within supply at 0.7029/0.6664, price is testing waters above the trendline resistance. In addition to this, daily sellers appear ready to retake resistance at 0.6931. A notable H4 close north of the bullish pennant pattern may help confirm upside on the higher timeframes.

As for the H1 timeframe, intraday traders are likely zeroing in on 0.69 as possible support, particularly at the point the level unites with trendline support.

July 2nd 2020: DXY Nudges Towards 97.00 Ahead of US Non-Farm Payrolls, FP Markets

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern between 118.66/104.62.

April and May were pretty uneventful, with June also wrapping up indecisively in the shape of a doji candlestick pattern.

Areas outside of the noted triangle pattern can be seen at supply from 126.10/122.66 and demand coming in at 96.41/100.81.

Daily timeframe:

Despite failing to connect with the 200-day simple moving average at 108.37, upside momentum came to an abrupt halt Wednesday and produced a bearish outside day.

Snapping a two-day winning streak, recent action shines light back on demand at 105.70/106.66.

H4 timeframe:

Buyers and sellers went head to head at resistance from 108.09 in the early stages of Wednesday, with sellers clearly outweighing buyers here.

Price action, as you can see, settled just ahead of demand at 107.03/107.28, a decision point to break through 107.45 and 107.64. It should also be noted we have a trendline support lurking just beneath the zone (106.58).

H1 timeframe:

Wednesday observed trendline support (106.07) step aside, with price also unwinding through 107.50.

Maintaining a position sub 107.50 today and toppling the 100-period simple moving average nearby may attract shorts into the market, in favour of a dip to 107.

Structures of Interest:

While we are working with a bearish outside day on the daily timeframe, H1 sellers under 107.50 are in a precarious position owing to the top edge of H4 demand set close by at 107.28.

On account of the above, buyers out of H4 demand will have plenty of sellers to buy into.

July 2nd 2020: DXY Nudges Towards 97.00 Ahead of US Non-Farm Payrolls, FP Markets

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Support at 1.1904/1.2235 and long-term trendline resistance (1.7191) remain clear structure on the monthly timeframe, with the latter prompting a notable upper shadow in June.

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008, placing 1.1904/1.2235 in a vulnerable position.

Daily timeframe:

Demand at 1.2192/1.2361 recently welcomed price action, stirring buyers and consequently chalking up two back-to-back bullish candles, each closing just shy of best levels. The demand, as underscored in recent analysis, is an area not only fastened to the top edge of monthly support, it is also considered the decision point to break 1.2647 (April 14 high).

The 200-period simple moving average at 1.2681 is likely marked as the next available resistance on this timeframe.

H4 timeframe:

The spirited response out of demand from 1.2231/1.2279 recently pulled H4 through trendline resistance (1.2813), and potentially liberated buyers to supply at 1.2652/1.2544.

H1 timeframe:

Supply at 1.2415/1.2386, housing the 1.24 level and intersecting with the H4 trendline resistance underscored above, loosened its grip Wednesday. This resulted in the taking of 1.2450 resistance and throwing light on the 1.25 level.

Also, traders may find interest in noting the RSI oscillator recently drilled into overbought territory.

Structures of Interest:

Upside pressure from daily demand at 1.2192/1.2361 and the break of H4 trendline resistance is likely to force H1 to address 1.25 today. Before doing so, however, a dip/retest to 1.2450 may come to fruition, offering an intraday platform to consider buying opportunities from.

Targets from 1.2450 are seen at 1.25 and the lower ledge of H4 supply at 1.2544.

July 2nd 2020: DXY Nudges Towards 97.00 Ahead of US Non-Farm Payrolls, FP Markets

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